122 Misc. 164 | N.Y. Sur. Ct. | 1923
The petitioner, the Hurley Machine Company, in this proceeding seeks to have two claims adjudicated against the estate.
(1) By a decree of this court, affirmed by the Appellate Division, the Hurley Machine Company has established its right to an interest in certain patents owned in his lifetime by the decedent. The amount due under that decree has been fixed by stipulation of the parties at the sum of $10,705.03. The first question involves the right of the estate to set off against this amount a claim for royalties alleged to be due from the Hurley Machine Company. Muser was the owner of two patents of mechanical devices used in washing machines. On December 12, 1917, Muser and the company entered into two license agreements and a supplemental contract to manufacture under the patents, and for the payment of royalties. A question existed as to the validity of the patents, and the supplemental agreement required Muser to commence an action within six months from January 1, 1918, in the United States District Court to test that question and to prosecute an appeal to a final determination in the United States Circuit Court of Appeals by January 1, 1920. The action was begun but Muser died in 1919 and his executrix was substituted in his place as a party. The fair import of the supplemental agreement was that if the patents were
The further contention of the Hurley Company that the judgment of invalidity by the United States District Court exempts it from further payment is likewise untenable. The decision of the District Court, whether favorable or adverse, did not affect the continuation of the agreement. The Hurley Company might have terminated, by proper notice. Instead it continued to manufacture and sell the patented articles in the manner authorized by the agreement. It cannot, in disavowal of its terms, escape liability. The inconsistency of its position is emphasized by its claims against the estate to royalties accruing from other licensees after the decision by the District Court. Judge Cardozo in his opinion in Farnsworth v. Boro Oil & Gas Co., 216 N. Y. 40, 46, points out, in a somewhat similar situation, that one enjoying rights is estopped from repudiating the dependent conditions and obligations which he has assumed. He states: “It is the same as that of a licensee who has acquired the right to manufacture under an outstanding, though defective, patent. * * * The licensee will not be heard to say that the patent is a nullity (Marston v. Swett, 66 N. Y. 206; 82 N. Y. 526; Hyatt v. Dale Tile Mfg. Co., 106 N. Y. 651; Hyatt v. Ingalls, 124 N. Y. 93).” See, also, Saltus v. Belford Co., 133 N. Y. 499; Bennett v. Iron Clad Mfg. Co., 110 App. Div. 443; Union Mfg. Co. v. Lounsbury, 41 N. Y. 363.
(2) The second claim is to a share of certain royalties which accrued to the estate from the Conlon Electric Washer Company. I am of the opinion that this claim must be disallowed. The dispute between the Conlon Company and the executrix was compromised and the settlement approved by an order of this court. No reservation in the compromise agreement inured to the benefit of the Hurley Company. The question as to the reasonableness of that settlement was subsequently raised in the prior accounting by the objections of the petitioner here. That issue was heard by the referee and his finding was adverse to the petitioner. The decree of the surrogate confirmed the report and expressly limited the recovery of the company to its share of the royalties set forth in the account of the executrix and actually received by her. This
The claim of Paul F. Compart is disallowed.
Submit decree accordingly allowing the counterclaim of the estate in the sum of $10,859.84 for royalties to October 1, 1920, and $7,094.50 for royalties to December 14, 1921, a total of $17,954.34, and crediting to the Hurley Machine Company the sum of $10,705.03. Interest may be adjusted on the settlement of the decree.
Decreed accordingly.